Case Study – LPADoc
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The EU regulation Nr. 1286/2014 requires financial service providers to make a standardised product information for private customers available before they can purchase so called PRIIP-products. Scope and content of the document have to follow strict guidelines. Regarding the required data, the creation of such content poses significant challenges to the respective bank. We were tasked with covering the product range of the client from structured bonds and certificates, to OTC-derivatives in accordance with the regulation. For every emission and every OTC-derivative a KID-document had to be made available in all relevant languages.
The Strategy / Our Approach
For the implementation, we subdivided the project into three segments: While the product universe was determined together with the client, the IT-requirements were identified, and the smooth onboarding of the external simulation-provider was taken care of. A combined team of product specialists from both sides developed a product catalogue that categorized about 200 product variants into logical units. In a next step, for every category consistent product descriptions were created and saved as fragments in LPADoc for further use. The classification of products laid the foundation for the regulatorily required division of products according to various criteria.
For maximum flexibility, we chose a LPA-hosted solution during the development stage of the project. Only in the last phase the almost finished software solution was implemented into the client’s infrastructure. The connection of various bank-internal systems happened between the client and us during an agile development process. Our customising team was leading the way for the technical configuration of the client’s system using its vast experience in the field.
Technically more challenging was the alignment of the calculation provider. Here, the products that were to be simulated needed to be understood in detail and be technically transported accordingly. The task was given to an interdisciplinary team of finance and IT experts, which aimed for a standardised solution for the description of structured financial products.
For the implementation we used our software for the automation of documents: LPADoc. To be able to generate the regulatorily required documents, all products had to be identified.
With the PRIIP-regulation going live, LPADoc is producing about 10,000 fully automated and compliant KID-documents in five languages for the Scandinavian market overnight. These documents get published on several websites, are available internally via CRM for the sales team and externally for partners via data platforms. What is more, the thus developed central product database also serves as a source for instrument data in internal and external systems. Not least, LPADoc is an integral part of the emission process of the bank, from the launch and subscription phase, to the transaction.